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Trump Lawyer Ordered to Testify Tomorrow in Classified Documents Case; TikTok CEO to Testify Parent Company Not an Agent of China; Fed Raises Rates By a Quarter-Point Put Signals Pause is Near. Aired 7-7:30a ET

Aired March 23, 2023 - 07:00   ET



KAITLAN COLLINS, CNN ANCHOR: Fortunately, he was over a body of water.

DON LEMON, CNN ANCHOR: Yes. Can you imagine if the water --

COLLINS: There wasn't a body of water there. Of course, he did then managed to resurface and swim despite the fact that his feet were still tied together. He was left covered in bruises. And he says the park did refund the cost of the jump, paid for his X-ray and ultrasound scans. I think that's probably the least they could do. All right, we'll stay on top of that, that alarming video this morning.


COLLINS: CNN This Morning continues right now.


ANDERSON COOPER, CNN ANCHOR (voice over): Two pieces of former president's multifaceted legal saga.

UNIDENTIFIED FEMALE: We've learned that the district attorney's office is weighing whether or not they should bring Michael Cohen back before the grand jury.

ELIE HONIG, CNN SENIOR LEGAL ANALYST: This is a warning sign for prosecutors and the fact that they're considering this is a real problem.

UNIDENTIFIED FEMALE: The major loss for Trump in the Mar-a-Lago classified documents case.

UNIDENTIFIED FEMALE: The D.C. Circuit Court of Appeals ruled that Trump's attorney must testify again before a Washington grand jury.

UNIDENTIFIED MALE: This is a real serious ruling. The judge thinks there's probable cause there's a crime there.

HARLOW (voice over): TikTok on the hot seat as the CEO appears before a key House committee in just hours. UNIDENTIFIED MALE: Some politicians have started talking about banning TikTok. Now, this could take TikTok away from all 150 million of you.

UNIDENTIFIED MALE: There's a national security concern. There's a privacy concern here.

UNIDENTIFIED MALE: They are under pressure like no other tech company.

UNIDENTIFIED MALE: The Los Angeles hit by a rare tornado, the strongest in 40 years.

UNIDENTIFIED MALE: We thought it was an earthquake. They started screaming earthquake and then the power just went out. And then everyone started running.

UNIDENTIFIED MALE: We watched it come flying straight across there, unbelievable, 150 feet tall just swirling around.

UNIDENTIFIED MALE: You just don't think southern California having this storm like this.

WOLF BLITZER, CNN ANCHOR (voice over): The Federal Reserve just raised interest rates again despite the bank meltdowns rattling financial markets.

JEROME POWELL, FEDERAL RESERVE CHAIR: Our banking system is sound and resilient.

UNIDENTIFIED FEMALE: The Fed now has to do two things at once. It has to ensure the stability of the banking system but also keep up that inflation fight.

LEMON (voice over): An off duty pilot taking over in the cockpit of a Southwest Flight after the captain suffered a midair medical emergency.

UNIDENTIFIED MALE: The captain became incapacitated while en route. He's in the back of the aircraft right now with a flight attendant, but we need to get him on an ambulance immediately.


LEMON: Can you imagine everyone thinks about what would I do if I was -- if you were on that plane.

HARLOW: You can fly on that plane.

LEMON: I know. But that is -- I hate this cliche worst nightmare, but that is worst nightmare, yes.

COLLINS: Yes, if we needed more anxiety in the skies.

HARLOW: Flying.

LEMON: And what's happening right now.

So, speaking of, good morning, everyone, welcome into CNN This Morning. We're following major developments in two different investigations of the former president, Donald Trump. His own defense attorney has been ordered to testify tomorrow in the special counsel's probe of classified documents at Mar-a-Lago. This is a huge legal blow for the ex-president. An appeals court has agreed that Trump may have used the attorney, his attorney, to commit a crime when the FBI was trying to locate and retrieve top secret files from Trump's private club.

We're also learning that the attorney needs a turnover handwritten notes that could end up being key evidence. We're going to explain all of it to you. There's a lot here.

Also here in New York, it could be a very big day in the Stormy Daniels hush money investigation. The grand jury is set to reconvene today as it weighs charges against Trump. Any indictment would be unprecedented. No sitting or former president has ever been charged with a crime in U.S. history.

So, we turn now to CNN's Kara Scannell, has been following this case and is here with us now. Kara, we know there's a lot, we're going to break all of it down because there're several different cases here. But let's talk about what this Costello testifying in the impact that it has with the D.A.'s office, et cetera, et cetera, et cetera?

KARA SCANNELL, CNN CORRESPONDENT: Right. So, Robert Costello, he was a witness to testify before the grand jury on Monday, and that was at the request of Trump's legal team. He told us that he said that he said he -- Michael Cohen was wrong, that Michael Cohen lied, that Cohen said that he made these payments, the hush money payments, in coordination with and at the direction of Donald Trump. Costello said when he was talking to Cohen in 2018 and representing him, that Cohen told him that Trump had no involvement.

So, since then, our reporting and our sources tell our colleagues that the D.A.'s office is regrouping. They're looking to see whether they need to bring in another witness, whether they need to bring back Michael Cohen or whether they're satisfied and they'll move forward.

So, there's just a lot of uncertainty because the grand jury process is secret. We know that they are coming in today. It's unclear what will be before them today could be a witness. Maybe it will -- they'll hear something else and it won't be related to this case. But it's -- we now are reaching this point where it feels like a decision is going to make because, you know, whether they're going to bring in another witness to try to rebut Costello or whether they will make a decision and ask the grand jury to indict.

HARLOW: As the saying goes, right, that the grand juries will indict a ham sandwich, meaning they generally will hand over an indictment.


Then it's up to Alvin Bragg to make just such a critical decision that no prosecutor has ever made, as Don said before, in U.S. history, is do you indict Trump on this, do you charge Trump with a crime on this. And He said a few days ago, my office will not be intimidated.

SCANNELL: Right. And, I mean, they're doing their job, right? They're doing this behind closed doors, and there's not an imminent deadline. This grand jury sits until June. So, they could take more time if they wanted, although they have presented all of the witnesses that, you know, have some nexus to this, or most of them, but they can take their time given the historic nature of this and given how they're considering charging it using potential laws that have not been tested in this way, this falsification of business records and tying it to campaign finance.

So, there's a lot at stake here. I think there's being considered in making their decision. And then they can go to the grand jury and asked them to vote. But the timeline of this, we're just not sure how soon or how long it will take.

LEMON: I think it was maybe Chris Christie, but someone said, you know, you talked about, Poppy, that dieting hand sandwich. They said the trouble for Donald Trump is that you can also convict a ham sandwich as well. It's very easy. So, I don't know that to be true.

HARLOW: But this is a tough case.

LEMON: This is a very tough case, but that is what -- meaning, I guess, politically, the ramifications could be when it comes to this, so we'll see. We'll see. Thank you, Kara. I appreciate it.

COLLINS: And we're busy today. Also now, we're going to talk about the other investigation that we have been tracking very closely this week. This is into the classified documents. Because yesterday, an appeals court has ordered that Trump's own defense attorney, the one you see here, Evan Corcoran, must testify tomorrow and turn over his handwritten notes.

I want to bring in CNN's Justice Correspondent Jessica Schneider. Jessica, I was struck by the statement from Ty Cobb, who, of course, was a White House attorney when Trump was president, that he said last night, he said Trump has turned more attorneys into witnesses than any criminal defendant in the history of the U.S. justice system. Obviously, you know, speaking with some hyperbole there, but making the point that it's just remarkable that we're seeing another Trump attorney going for the grand jury, this time with no attorney-client privilege to say to why he can't answer certain questions.

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Yes. So, this is a big blow to Trump and his legal team, but a big boost for the special counsel. This is a top Trump attorney being compelled to give this testimony about his interactions with Trump.

And in this, Kaitlan, the courts have really moved swiftly on this. This has been a rapid fire legal battle that's only played out over the past couple of days. And we've learned that Corcoran is expected to appear before the grand jury actually tomorrow. And this is all really potentially key to the special counsel's classified documents probe. Because I'll take you back, Corcoran is the attorney who drafted a statement in June. He said that Trump's team had done a diligent search of Mar-a-Lago, that there were no remaining classified material there, but in fact, weeks later, the FBI searched Mar-a-Lago, found hundreds of government records, including some of that classified material.

And then in the wake of that in January, Corcoran was called before the grand jury. He was asked about what happened in the lead up to that FBI search, but he declined to answer some of the questioning because he did cite that attorney-client privilege. So, then DOJ challenged that. They said that Corcoran's discussions with the former president really could have been part of an attempt to plan a crime. And because of that, Corcoran should be compelled to testify.

So, Kaitlan, that's exactly what is happening here. Evan Corcoran lost at the district court level. Now, he lost at the D.C. Circuit Court of Appeals and now scheduled to testify before the grand jury tomorrow.

COLLINS: And they're not going to go to the Supreme Court, which I think is something people may have assumed they were going to do yesterday. But what is the Trump team saying because they're clearly not happy about this? They think it says something about the merits of the actual documents investigation itself.

SCHNEIDER: Yes. So, they're responding here, Kaitlan. They're saying there is no factual or legal basis or substance to any case against President Trump. The real story here is that prosecutors only attack lawyers when they have no case, whatsoever.

But, really, in reality, Kaitlan, this is significant because Evan Corcoran, he may have that key information about what transpired behind the scenes throughout all those months of negotiating with DOJ to get those classified documents out of Mar-a-Lago back to the government's hands.

And key here, Kaitlan, you know, whether there was any obstruction by the former president by any of his top aides in getting those documents back into the government's hands. So, Evan Corcoran could potentially have a lot to tell the grand jury when he meets before them tomorrow.

COLLINS: Yes. Now, the big question is what does he say. Jessica Schneider, thank you.

HARLOW: All right. Let's talk about all of this with former Assistant Special Watergate Prosecutor Nick Akerman. Well, you have some experience in this --

LEMON: A little bit.

HARLOW: All right. Where do we begin? I know that you think that they're likely to immediately grant Evan Corcoran immunity if he should take the Fifth.


NICK AKERMAN, FORMER ASSISTANT SPECIAL WATERGATE PROSECUTOR: If he should take the Fifth Amendment right. I think he's extremely important witness.

HARLOW: Okay. Let's -- so take that immunity question off the table. Why is he so key?

AKERMAN: Well, because it all evolves around the obstruction issue. And there's a grand jury subpoena that was served on the Trump people back in May of 2022, asking for all the documents that he still had in his possession. And at that time, a lawyer by the name of Christina Bobb provided a declaration affirmation and certification saying that there had been a diligent search and that these were all the documents, basically --

HARLOW: A diligent search was conducted of the boxes that were moved from the White House to Florida.

AKERMAN: That's right.

HARLOW: Signed, sealed, delivered.

AKERMAN: Exactly. And it turns out that she really didn't conduct that investigation. She later said that she kind of put other language at the bottom of that certification, saying that it was to the best of our knowledge, and it turns out that the person who drafted that declaration was Corcoran.

So, the question is what did Donald Trump say to him about that? Who did the investigation? When was it done? How was it if somebody did a diligent search that they didn't look in Donald Trump's office and in his own desk drawers where he had all those classified records, including his safe, his personal safe that was in the office?

COLLINS: And a folder in his bedroom, too.

AKERMAN: Yes. So, I mean, this search clearly wasn't diligent. There were conversations and phone conversation between Corcoran and Trump at the time. And the question is what was said. I mean, this is unusual with an attorney-client privilege. It doesn't happen all the time.

The purpose of the privilege is so that a client can come in, can tell you what happened and you can give him advice. And here, it wasn't. I mean, I think what the judges found was that what Donald Trump was doing was basically using the attorneys to perpetrate a criminal scheme to obstruct the government in obtaining the rest of those documents.

LEMON: at the risk of stating the obvious and overstating the obvious, we're talking about the classified documents that Kaitlan and I have been talking. There's so much like that. It just comes at you the viewer at home. Wait, what are they talking about? The D.A.? Is this George? Is this -- this is just -- this is the classified documents that we're talking about now. I just want to give the Trump response and then get you. A spokesperson said, there is no factual or legal basis or substance to any case against President Trump, and then added, the real story here is that the prosecutors only attack lawyers when they have no case, whatsoever. It's part of your reporting and others reporting here from this response. What are your thoughts?

AKERMAN: Best evidence is the last time that somebody obtained documents that were claimed to be attorney client privilege by Trump's people. John Eastman had to turn over an extremely significant email to the January 6th committee where basically he admitted in that email that Trump was going to file a false declaration in federal court in Georgia, knowing full well that all of these allegations of voter fraud were false, that there were no dead people voting, that there were no people from out of state voting, etcetera. And that was a situation where Judge Carter in California found that the attorney- client privilege did not apply because it was in furtherance of a crime. And that was the crime. And the same thing had to have been found here. We don't know the details of that.

COLLINS: We don't. There's a lot we don't know. And I think that's what -- we don't even know what Evan Corcoran is going to say. We don't know that it will be damaging. Maybe it won't be.

AKERMAN: That's right.

COLLINS: But I think what's so remarkable to look back at this is that that is John Eastman has nothing to do with this. But the fact that twice and just the span of this period of time, judges have decided that Trump attorneys can go and they don't have the attorney- client privilege protection is so rare.

AKERMAN: It is so rare. But the fact of the matter is, clearly, clearly, beyond any doubt with John Eastman, that was a statement that was in furtherance of a crime where they were going to be filing false information about there being election fraud.

LEMON: Just real quick, because we have to go on. I want to talk about just the D.A. This is the Manhattan one that I want to talk about. That was the documents. This is Manhattan. I said something earlier about, you know, you can indict a ham sandwich, and I thought it was Chris Christie who said it, but I think it was Alan Dershowitz who said that it was -- that you can convict. But in New York, you can also convict him sandwich because the jury pool will be very much against Trump and the judges will be very much against Trump. What do you make of that?

AKERMAN: No, you're not going to be able to convict anybody. Every jury I've ever had in Manhattan has been extremely serious. They take their jobs seriously. They look at the evidence. In terms of the grand jury, even -- look, I've been in this situation before. You take your time. This is an extremely important case. The stakes are very high. They don't want to screw it up. They want to make sure it's done properly.

[07:15:00] And if it takes another day to make sure that they've got all their Ts crossed and their Is dotted, so be it. That's what they should be doing. That's the responsible way to conduct this investigation.

HARLOW: Thank you, Nick.

LEMON: Thank you, Nick. Good to see you.

AKERMAN: Good to see you.

HARLOW: So, Federal Reserve did raise interest rates again. Why Chair Jerome Powell says it may be close to the end of breaking these hiking these rates, that's ahead.


COLLINS: Happening right now, as you can see here, there are major protests happening in two key cities, Paris on your left, Jerusalem on your right. In France, 12,000 police officers are mobilizing this morning as the country is bracing for even more protests over a policy from the French president, increasing the retirement age from 62 to 64.

On the right in Israel, a separate protest but one that is ongoing. This is about the government's push to weaken the judicial system and the Supreme Court. We're going to continue to monitor both this morning as they're both very important and have been building for weeks happening.

LEMON: Also happening today, the TikTok CEO, Shou Chew, will be making his case to lawmakers with the popular app's future in the U.S., it's really on the line right now.


U.S. officials are threatening to ban TikTok. Chew will try to reassure policymakers that it isn't a national security threat. That's his mission today. He plans to argue that the app's parent company, ByteDance, is not an agent of China or any other country.

So, let's bring in now our Caitlin Chin from the Center for Strategic and International Studies, where she researches technology regulation in the United States and abroad. Caitlin, we're so happy to have you this morning to get us -- to walk us through this story. Thanks so much.

Can Chew prove to lawmakers in his testimony today that the U.S. user here, that the data is safe from users here? And that is a big concern.

CAITLIN CHIN, FELLOW, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: I think a lot of lawmakers have already made up their minds about TikTok and whether or not it poses a national security threat. Now, there is no universal consensus among lawmakers about what exactly this threat is. On one hand, some lawmakers are saying that TikTok is like digital opium, or like fentanyl that's addicting our children, and then we have other lawmakers that are saying that the Chinese government is using TikTok as a spy vessel, as a propaganda tool.

Now, we don't have any actual evidence yet that the Chinese government has done so. But I would expect that anything that Shou Chew says before Congress will not make a big difference.

LEMON: You write an article, and this is for Barron's and its title, the plans to ban TikTok aren't really about TikTok. And in it, you wrote, in part, calls for a ban were never really about TikTok. They are about China, and it could have unintended consequences for U.S. businesses. Can you explain what you mean by that, Caitlin?

CHIN: Sure. A lot of the concerns about TikTok or that the Chinese government, because of Chinese surveillance laws, can broadly access personal information that's either stored or transferred within borders. Now, if the United States either bans TikTok or forces TikTok the sell to a U.S. company, this isn't going to affect just TikTok. This could potentially affect any Chinese or even any non-U.S. company that wishes to operate in the United States. I mean, in 2023, every company operates a website. Every company collects data. So, every company is a tech company. But it could also affect U.S. companies as well that wish to operate abroad.

There are a lot of countries that have concerns about the lack of data privacy laws in the United States. There are a lot of countries that have concerns about U.S. government surveillance, too. So, if the United States takes this very unprecedented move to either ban TikTok or force it to divest, this could have longer term ramifications for the global economy.

LEMON: Yes. At least 150 million people will be watching at least. Thank you very much, Caitlin Chin. We appreciate you joining us.

CHIN: Thank you.

LEMON: So, be sure to watch CNN Primetime tonight. CNN's Abby Phillip is going to host it, Is Time Up for TikTok, tonight, 9:00 Eastern right here on CNN.

HARLOW: All right. The Federal Reserve making clear yesterday it is not letting up its fight on inflation yet despite concerns another interest rate hike could stress the banking system even more. Yesterday marked the ninth straight increase of interest rates, this time by a quarter percentage point. Fed officials noted the recent banking turmoil likely will actually help in its fight on inflation, leading to tighter financial conditions, hopefully helping their mission of slowing down the economy.

I know it seems antithetical, but that's why we have Jason Furman here, Harvard professor and top former Obama economic adviser to explain. Jason, good morning.

This is what you thought would happen, 25 basis points. I just wonder, did the Fed sort of split the baby here and not help inflation that much but not hurt the banks that much, so where does that leave us?

JASON FURMAN, PRACTICE OF ECONOMY POLICY PROFESSOR, HARVARD UNIVERSITY: I mean a little bit, but there was really no good choice here. They have this problem with the banks. They don't know how big that problem is. They have a problem with inflation. They don't know if that problem is going away. And so, you know, splitting the baby might have been the best of the bad options here.

HARLOW: You just said they don't know how bad the problem with the banks is, but we heard Powell say yesterday quote our banking system is sound and resilient with strong capital and liquidity. Is it?

FURMAN: Well, I would separate two questions. One is, is your money safe in the bank? Absolutely, first of all, up to $250,000. It's insured above that. I believe they're going to make sure that everyone can get all their deposits out.

There's then a separate question, though, of our banks going to continue lending and how much are they going to continue lending. Certainly less than they were before. How big that credit crunches for the economy, that's what they don't know, that's what no one knows.

HARLOW: That credit crunch is something that Larry Summers warned about when he was on with us last week. That always hurts. This lending issue is going to hurt the smaller companies, the more vulnerable folks -- it's not the big guys that get hurt in that.


FURMAN: Yes, absolutely. If you're a big company, you might be borrowing in the bond market. Those interest rates have actually fallen, not risen. If you're getting your loans from a really big bank, you're probably okay. But if you're getting your loans from a regional bank, from a small bank, where so many small businesses are, it -- you know, the interest rate they post may look fine to you, they'd just not be willing to make a loan at that interest rate.

HARLOW: I'm so glad you make that point, because this is why these smaller regional banks are so important. 40 percent of loans come from banks outside of the biggest 25 banks.

FURMAN: Yes, that's absolutely right. And the Fed has a tricky balancing act. They actually do want to slow the economy. They do want less lending, less borrowing, et cetera, they just don't want it to happen in a dramatic and uncontrolled fashion, and that's what we're trying to do. And mostly they're using other tools. They're lending money to banks. They're extending deposit insurance at least two to banks so far. So, they're using different tools they have to keep that banking system alive while trying to focus their interest rates on their primary mandate, which is inflation.

HARLOW: Jason, Jerome Powell also said yesterday that their actions demonstrate, quote, all depositors' savings in the banking system are safe. But then in her testimony before Congress later yesterday, Treasury Secretary Janet Yellen said this.


JANET YELLEN, TREASURY SECRETARY: That's not considered or discussed anything having to do with blanket insurance or guarantees of the deposits.


HARLOW: So are they or aren't they protecting all depositors above $250,000 like they did for these two failed banks?

FURMAN: Look, I think the communications yesterday was unfortunate. I hope it gets cleaned up very, very quickly. My own belief is having paid 100 cents on the dollar for the depositors at Silicon Valley Bank and Signature Bank, they're going to continue doing that. Maybe it's not a blanket guarantee but it will be on a case-by-case basis. But every single case we'll get that treatment. You can't give money to these people in Silicon Valley and then have a bank in the Midwest run into problems and not ensure their deposits too. They're going to do it, but whatever they say.

HARLOW: Quite a pickle there, and you can't pick winners and losers. But, yes, I think that needs to be cleaned up right away for the American people. Jason, thanks very much.

FURMAN: Thank you.

COLLINS: Also this morning in California, a rare tornado ripped through the Los Angeles area. It's the strongest that they've seen in 40 years. We're going to take you there next with these remarkable videos coming out.

Also off the clock, but luckily still on alert, an off duty pilot actually had to step in when a plane's captain needed medical attention mid-flight.


UNIDENTIFIED MALE: The captain became incapacitated while en route. He's in the back of the aircraft right now with a flight attendant.